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Australian Dollar struggles against Japanese Yen despite hawkish RBA Minutes

  • AUD/JPY falls despite hawkish RBA Minutes showing readiness to raise rates further if financial conditions require it.
  • China’s manufacturing and non-manufacturing PMIs both rose, beating market expectations to signal steady economic expansion.
  • Japan’s Finance Minister Katayama warned Tuesday that the government will intervene appropriately to address volatile currency moves as needed.

AUD/JPY loses ground after remaining flat in the previous day, trading around 111.40 during the Asian hours on Tuesday. The currency cross remains subdued as the Australian Dollar (AUD) holds losses following the release of the Reserve Bank of Australia’s (RBA) Meeting Minutes and key Purchasing Managers’ Index (PMI) data from China.

The RBA June monetary policy Meeting Minutes revealed that while the board views current financial conditions as somewhat tight, it remains prepared to implement further rate hikes if necessary to ensure price stability. The central bank highlighted that the ongoing conflict in the Middle East poses a dual threat to the economic outlook, presenting significant upside risks to inflation alongside downside risks to overall growth.

China, Australia’s close trading partner, showed stronger-than-expected resilience in June. The official Manufacturing PMI edged up to 50.3 from the previous 50.0, beating market expectations of 50.1. Simultaneously, the NBS Non-Manufacturing PMI improved to 50.2 from May’s 50.1, comfortably defying the consensus forecast of a contractionary 49.9 print and signaling expansion across both sectors.

The downside of the AUD/JPY cross is limited by persistent weakness in the Japanese Yen (JPY), which remains under pressure due to the wide interest rate gap between Japan and other major economies. This ongoing depreciation has kept policymakers concerned and investors on high alert for potential currency intervention by Tokyo. Highlighting this stance, Japan’s Finance Minister Satsuki Katayama stated on Tuesday that the government “will respond appropriately to currency moves at any time as needed.”

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  • EUR/JPY weakens to near 184.85 in Tuesday’s early European session.
  • Japan’s Katayama said the government was ready to take appropriate action against excessive currency moves.
  • Traders reduce their bets on the ECB rate hikes this year.

The EUR/JPY cross loses ground to around 184.85 during the early European trading hours on Tuesday. The Japanese Yen (JPY) rebounds against the Euro (EUR) as traders on alert for possible intervention from Japanese authorities. Germany’s Retail Sales and inflation data will be published later in the day.

Japanese Finance Minister Satsuki Katayama on Tuesday reiterated the authorities stood ready to respond appropriately at any time. Meanwhile, Chief Cabinet Secretary Minoru Kihara said that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the Japanese Yen’s current level.

“It’s a question of when, not if, the Ministry of Finance (MOF) intervenes again to support the yen,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

ECB President Christine Lagarde said in a speech opening her institution’s annual retreat on Monday that Europe is becoming less vulnerable to outside shocks thanks to a better financial framework and progress on the green transition. Lagarde emphasized that tensions subside amid a peace deal, which is “far from assured.” Policymakers must decide whether further monetary tightening is needed.

Markets have pared expectations for future ECB rate increases as energy prices retreat. Oxford Economics and Capital Economics expect the ECB won’t raise the interest rates further, though investors are still pricing one more quarter-point move, which would bring the deposit rate to 2.50%.

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Euro softens against Japanese Yen as traders on alert for possible intervention

  • EUR/JPY weakens to near 184.85 in Tuesday’s early European session.
  • Japan’s Katayama said the government was ready to take appropriate action against excessive currency moves.
  • Traders reduce their bets on the ECB rate hikes this year.

The EUR/JPY cross loses ground to around 184.85 during the early European trading hours on Tuesday. The Japanese Yen (JPY) rebounds against the Euro (EUR) as traders on alert for possible intervention from Japanese authorities. Germany’s Retail Sales and inflation data will be published later in the day.

Japanese Finance Minister Satsuki Katayama on Tuesday reiterated the authorities stood ready to respond appropriately at any time. Meanwhile, Chief Cabinet Secretary Minoru Kihara said that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the Japanese Yen’s current level.

“It’s a question of when, not if, the Ministry of Finance (MOF) intervenes again to support the yen,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

ECB President Christine Lagarde said in a speech opening her institution’s annual retreat on Monday that Europe is becoming less vulnerable to outside shocks thanks to a better financial framework and progress on the green transition. Lagarde emphasized that tensions subside amid a peace deal, which is “far from assured.” Policymakers must decide whether further monetary tightening is needed.

Markets have pared expectations for future ECB rate increases as energy prices retreat. Oxford Economics and Capital Economics expect the ECB won’t raise the interest rates further, though investors are still pricing one more quarter-point move, which would bring the deposit rate to 2.50%.

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EUR/JPY Price – Gains above 184.00, but bearish technical bias persists below 100-day SMA

  • EUR/JPY gains traction around 184.20 in Monday’s European session. 
  • The negative outlook for the cross prevails under the key 100-day SMA, with bearish RSI momentum. 
  • The initial support level is seen at 183.55; the first upside barrier to watch is 184.55. 

The EUR/JPY cross trades in positive territory near 184.20 during the early European session on Monday. However, the potential upside for the cross might be limited as traders are nervous about a fragile US-Iran ceasefire. 

The US and Iran traded fresh barbs over the weekend before they agreed to halt attacks and meet in Qatar on Tuesday. Uncertainty surrounding US-Iran talks could weigh on the riskier assets, such as the Euro (EUR) against the Japanese Yen (JPY). 

Furthermore, mounting fears of Japanese market intervention could underpin the JPY. Japan’s Chief Cabinet Secretary Minoru Kihara said last week that officials will take appropriate action against the foreign exchange moves if needed.

The European Central Bank’s (ECB) annual forum this week will be closely watched as traders continue to monitor evolving central bank policies amid lower oil prices and stock market volatility. ECB President Christine Lagarde will open the forum on Monday. Any hawkish remarks from policymakers could help limit the EUR’s losses in the near term. 

Chart Analysis EUR/JPY

Technical Analysis:

In the daily chart, EUR/JPY holds a bearish near-term bias as the pair holds beneath the 100-day moving average and the Bollinger middle band. Price action remains capped by this clustered dynamic resistance, while the Relative Strength Index (14) at 42.65 stays below the neutral 50 line, hinting at fading bullish momentum rather than outright oversold conditions.

On the downside, initial support emerges at the lower Bollinger band around 183.55, which marks the first notable demand zone that could slow the current pullback. A clear break below this band would likely expose deeper corrective territory, while on the topside, a daily close back above the 100-day moving average at 184.55 would be needed to ease immediate pressure and open the way toward the Bollinger middle band near 184.95 and, later, the upper band at 186.35.

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EUR/JPY Price – Slips below 184.00 due to bearish near-term bias

  • EUR/JPY is bearish, trading below its nine-period and 50-period EMAs.
  • The 14-day Relative Strength Index at 38 signals continuing downside momentum, not an oversold reversal.
  • Spot above 183.81 VWAP means buyers control the EUR/JPY cross in intraday trading.

EUR/JPY inches lower after registering minor gains in the previous day, trading around 183.90 during the Asian hours on Friday. The currency cross maintains a bearish near-term bias as it holds below both the nine-period and 50-period Exponential Moving Averages (EMAs) at 184.38 and 184.91, respectively.

The EUR/JPY cross is remaining within the symmetrical triangle, suggesting market indecision and an impending breakout as energy builds, while the 14-day Relative Strength Index (RSI) has eased toward 38, hinting at lingering downside pressure rather than a decisive oversold reversal.

However, the session Volume-Weighted Average Price (VWAP) represents the true average price paid for a stock or asset throughout the day, weighted by volume. Because the spot price is higher than the VWAP of 183.81, it means buyers are firmly in control and are willing to pay a premium to acquire the EUR/JPY cross.

In context with the symmetrical triangle, volatility is shrinking. Think of it like a compressed spring; the market is resting and storing energy for a major breakout. Because the price is trapped between two converging trendlines, momentum indicators like VWAP lose their directional edge until a breakout occurs.

The initial support is aligned at the lower boundary of the symmetrical triangle around 183.40. Further declines would expose the four-month low of 181.87, recorded on March 16, followed by the six-month low of 180.81.

On the upside, primary resistance is seen at the nine-period EMA at 184.38, followed by the 50-period EMA at 184.91; a sustained break above these levels would soften the bearish tone and expose the upper boundary of the symmetrical triangle around 186.00. Further advances would support the EUR/JPY cross to test the all-time high of 187.95.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.03%-0.05%-0.11%-0.06%0.33%0.14%-0.17%
EUR0.03%-0.03%-0.06%-0.01%0.36%0.14%-0.13%
GBP0.05%0.03%-0.04%-0.01%0.39%0.19%-0.11%
JPY0.11%0.06%0.04%0.05%0.43%0.22%-0.06%
CAD0.06%0.00%0.00%-0.05%0.39%0.16%-0.13%
AUD-0.33%-0.36%-0.39%-0.43%-0.39%-0.20%-0.48%
NZD-0.14%-0.14%-0.19%-0.22%-0.16%0.20%-0.29%
CHF0.17%0.13%0.11%0.06%0.13%0.48%0.29%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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Yen Stays Near 40-Year Low

The Japanese yen traded around 161.7 per dollar on Friday, hovering near its weakest level since 1986 despite data showing Tokyo’s core inflation accelerated for the first time in eight months, reinforcing expectations that the Bank of Japan will continue raising interest rates. On Wednesday, BOJ Governor Kazuo Ueda reaffirmed his commitment to further rate hikes in line with economic, inflation, and financial developments. A day later, hawkish board member Naoki Tamura also advocated raising rates every few months. The BOJ is due to announce its next policy decision on July 31. The yen remained under pressure despite repeated verbal warnings from Japan’s Finance Ministry and record currency intervention in recent weeks, as a stronger dollar and the wide interest rate differential with the US continued to weigh on the currency while the Federal Reserve is expected to raise rates later this year.

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Trade of The Day – CHF/JPY

  • CHFJPY reversed from the key resistance level at 199.66
  • The pair has been trading in a downtrend since June 17

Trade Recommendation Trade:

Open a short position on CHFJPY at the current market price.

  • Target 1: 198.45
  • Target 2: 198.10
  • Stop Loss: 199.92

Analysis

CHFJPY has remained in a downtrend in recent sessions. On the H1 chart , the pair staged a local bullish correction, but buyers failed to break above the key 199.66 resistance , which is defined by the upper boundary of the 1:1 Overbalance structure and the 100-period moving average . According to the Overbalance methodology , as long as the price remains below this resistance level, the prevailing market sentiment stays bearish. With this in mind, further downside in CHFJPY appears likely. We recommend opening a short position at the current market price, targeting 198.45 and 198.10 , with a stop loss at 199.92 .

Source: xStation 5